even 10 years from now, the average underwater our work is still going to be under water -- underwater our work is still going to be under water -- underwater borrower is still going to be underwater. what happens five years from now when the borrower who has been paying their mortgage needs to move for a job or something like -- that is something that will be facing the industry. it has implications that will be hard to measure. i do not think any of us -- it certainly is having an impact on the mortgage markets themselves today. one of the reason among others that we see a low volume of purchases is there are people who are under water on their home and cannot sell their house to buy another one.

much of the research does show that ltv's make a difference. that research was done on a paradigm that is different from today. we are in uncharted territory at the moment in terms of how people behave. we do conceptually get the idea that somebody who is so deeply under water has less willingness. that is where the concept of shared appreciation comes into play. the point is, yes, it is a problem. we published statistics now on for -- completed foreclosures. foreclosures are down. that is a run rate. it is similar to last february. we are looking at 800,000 to 900,000 foreclosure is. why are we not foreclosing on

more people? there are a lot of people out there who are in the shadow inventory. why are they not being processed through foreclosure? foreclosure liquidations are rising. we are doing less foreclosures and more foreclosure liquidations in the form of all the things we are talking about. i suppose i could say things are getting better. they are getting better slowly. we should be looking at -- addressing the concept of willingness for those who are in delinquency, the concept of willingness for those who are current and not in sending them to go delinquent. and looking in the longer term, what are we going to do a bout those who behave exactly -- they want to pay the mortgages, but

12 years from now there are still under water. thank you. >> next up is paul. he will give some investor feedback on various principle modification programs. i think we have a few slides to draw your attention to as well. >> i will quickly address some of the data we have seen. we are going to look at the performance of various programs and modification performance. in terms of the historical performance, if you take a look at the top part of the slide on the screen, we take a look at the performance of principle bonds immerses rate -- principle mods versus rate mods. the statistic we show is a twelvemonth 3 default rate with

soprano on the left. principle modifications in great. in both cases you can see principle modifications tend to perform better. even in the sub prime sector where borrowers tend to default more for affordability reasons, there is still a pickup in performance for the performance of borrowers with principal modification. keep in mind the majority of these modifications involve forbearance rather than forgiveness. is possible for us to differentiate the performance of forgiveness other than to be able to tell the are better. anecdotally in conversations with various mortgage servicers, we do see a modest pickup for lunch with forgiveness versus forbearance. it is not massive or minimal, it varies by deal. there is a noticeable difference over the first 12 months. second of all, there are other factors that drive the

recidivism rates in addition to the principle modification decision. as i was saying before, the timing of one modification takes place makes a huge difference. if the borrower did not make payments for two years or more, they are used to making a zero payment. even if you cut 90% of your balance to still have to get closer to zero. if a borrower misses 6-12 months of payments would receive a modification, success rates are much greater. the payment cut is also a big driver of performance. if you cut a greater percentage of the payment, they continue to perform better. if we have the balanced reduction, and we have the depth of the pavement cut. the. to make here is clearly both of these sectors -- the point to make here is that all the

sectors matter quite a bit. you can see that any additional reductions in principal balance either through forbearance or forgiveness do not have a meaningful difference in helping the performance of the borrowers. this is an subprimal where affordability is a bigger deal for borrowers. the key question though is how do these borrowers perform over the long run? that is the key to the question for bondholders, tax payers. we do not have sufficient data to be able to tell whether the affordability issue will continue to drive performance and whether these borrowers are going to be able to refinance or move. if a borrower receives a principal modification and they pay down a little bit of principle, it is easier for them to move and refinance in five years. that will greatly decrease lifetime losses for these loans. if a borrower still has the ltv

in five years, who was with the incentives will be. the past five years the market has started to pay a lot more attention to rental growth. the modified payment is less than what the borrower would pay if they were forced to rent an equivalent property. we did a study on this for some prime borrowers and compared it against average rent in those cities. average refund modified subprime are paying 10% less than the equivalent in their cities. if rents are growing 3% or 5% a year, this only provides a greater disincentive for borrowers to default. if they think about what they would have to pay in rent. this is another factor we hear from servicers providing a greater disincentive for borrowers to default. it is possible the rate

modification allows them to lock in a lower payment that they would pay in rent. in conclusion just to sum this all up, we definitely see some cases where principle forgiveness would make more sense for borrowers compared to a rate modification, but it is a small step. you have to target the borrowers early in the delinquency cycle and you have to look at their underlying credit and make sure you are not cutting too much principle. we have not seen a huge pickup in moral hazard risk when different modification programs were rolled out. at the same time these modification programs are very specific. it was a possible for borrowers to tell which would receive a principal modification. as i was saying before, this cannot necessarily be extrapolated to the principle modification programs where policies would have to be more

institutionalized. at the same time we do see a number of principle modifications being ltv-. -- negative. thank you very much. i will turn now to andrew to make the case for principal reduction. he will also touch on the moral hazard as well. >> i would be glad to. i did not bring any slides but i brought one of these. unfortunately, the way the current servicing structure in the mortgage industry has developed, borrowers have no control over what happens to their servicing rights. who controls their mortgage. the way we have about modification rates is heads you lose and tails you lose. you have no way of knowing it with the exception of fha.

talking about fairness, we have narrowed the box a little bit. the broader conversation from a policy it perspective needs to get to the point of, if i look exactly like tony here -- we are similarly -- similarly situated are worse. if he got lucky and ended up in a note on the bank's portfolio, the bank has unlimited access to whatever decisions they want to make to modify the know. if i end up in a note that not sold into a private label security and the investor is willing to do principle reduction, maybe i will get it. if i got a servicer who is not a participant i guess i can put my. back in my pocket. there are 31 flavors out there. the idea that from a clear policy perspective we are going to incentivize or decent

incentivize borrowers to suddenly start strategically defaulting six years after house prices have peaked nationally, i think it overstates the likelihood we are going to see significant changes embar or behavior. i think rather than taking a categorical approach to the question of principle reduction versus forbearance, i think the individual -- i think it makes a lot of sense. i think it is far more complicated than the average borrower can really unwind given transparency in the process. i think it is a risk of a strategic default once we are clear there are half a million borrowers out there who made relative to the other waterfall tests get access to some degree of reduction rather than forbearance as opposed to -- if we build the principal reduction into the water fall the way it

exists for other servicers, i think the operational complexity again is a little bit overstated given that there is transparency around it in general. the model itself is not public. the factors that go into the decisions are made it known. there is a nap proprietary in their for borrowers who have not been strategic will suddenly start becoming strategic because there is an incentive component in the waterfall that is non optimizing anyway. i think it is really -- i think it misses the point that there is a tool available. it does show that there is benefit to the enterprises should they do principal reduction in certain instances. not to have that on the table, we know that private lenders and

services are doing give for an increasing share of their books and business. to say that we are going to do an analysis, we are not going to take that option. we will to the slightly less assessment and give you a slightly less valuable to us alternative does not make a lot of sense from a conservative perspective either. the idea you're still dealing with severe under water borers as opposed to a situation where the borrower does not need to go back to the letter to get approval for a sale, you are going to stagnate the market in places like phoenix and las vegas over the long term as opposed to having the liquidity -- the liquidity to move back in and allow other homeowners to buy, i think it has broad implications over the long term. while for parents has short-term benefits that may outweigh forgiveness, i think we are

taking a longer-term view, a willingness to pay as part of what any long-term strategy for the enterprises should be. i have been a supporter of principal reduction for the past four years. it should not come through as a surprise i am still advocating for it. i think also if they are not willing to do it, there are plenty of investors who are buying these notes, other nonprofits that is beginning to acquire notes on the open market, doing deep reductions because economically it makes a lot of sense. i think our folks will be happy to take some of those of your hands. over all i think investors are starting to see the opportunity

to buy these things at a discount and are doing a reduction because the long-term performance of these notes with the principle forgiveness makes a lot of sense, barking these properties to market. this is something we did during the depression. the refined as boris 80% of current ltv. -- borrowers 80% of current ltv. they rented as properties out before selling. that is another historical not to some of the work being done today in terms of the rental program. historically we have done this and has not led to strategic default. you can contain it by capping the start date so no new borrowers can get in. you are only getting into a pool of delinquent borrowers. you are really dealing with a

finance poll and said of an infinite pool. i think those are the questions i would like to see as you make a full analysis available to the public. >> i will wrap up on toney with his opening comments. >> the problems with being the last person on the panel is everyone has already had all the high points. my talking points are exhausted. having said that, let me continue on any way. i am the wrong person in the room who was relieved to hear mr. demarco say we need more analysis of this. what i want to guard against is anecdotal economic policy. the fact that we do hear tales -- i have heard them all that this will help salvage the housing market, principle reductions will end up helping out households, which of course it would. we do not have enough observations yet. mr. demarco touched on it.

we are talking about looking at the programs that you need to get out a certain number of years to see if these actually work. we have no idea of this works. we are guessing. what i am saying is, this is a major shift in economic policy. do we really want to go out on the edge based on a few anecdotal assumptions that this might work? i would argue more -- i would argue know. we need more studying. i agree with mr. demarco about forbearance. i will still take the marginal over zero. the point is that it is not just that comparison. there are other ways to get a run the problem. i mentioned shared appreciation. mortgages deflated rapidly.

i did a study of bank of scotland shared appreciation mortgage programs over there. the problem with those is the forecasts -- 2% rise in housing prices. houses go up 20% or down 20%, the game is over. there are problems with that. i think that is one reason they were hesitant to do that. bank of america just announced a pilot program on a mortgage to rent where they're trying to let households that are in trouble on foreclosure transition to the rental market. bank of america keeps the asset on its books for up to two years and sells it out to the market. there are lots of approaches that are different than simply doing principle reductions. principle reductions i would rank as last. should the law modifications,

forbearance, programs like bank of america, principal reduction should be the absolute reduction of last resort. here is the other problem. pandora's box. mr. the marco will thankfully keep the lid on that. suppose every time the stock market crashes and pension funds and retirees are in deep trouble. the administration comes along and sets up hamp or a stock market hamp. what kind of behavior but that breed in the stock market, do you think? i will take wild risks because i will get bailed out. even if this is constrained to fannie and freddie, i could picture the start doing it here and we will start making all private lenders to the same thing. even though we have no evidence in the long run that it works, we're going to force companies

and private entities to go through and do this as well. it is dangerous policy. even if it works, even if he thinks it works -- we have been on panels before. even if it works, it is a dangerous precedent. by the way, mr. demarco misstated a number. it was not 7 trillion dollars in equity losses, it is 7.4 trillion dollars. whatever we did to lose $7.4 trillion in equity and get into this miss we are in, can we change whatever at -- economic policies we have to push this down the cliff? thank you very much. >> thank you. i will start off with a few questions at opening up to you. i want to start with something i spoke about with mr. the marco.

the moral hazard issue, the change in behavior, and her pointed out the way to deal with that is based on historical delinquency. if he were delinquent previous to the date of the announcement, you can qualify. on the flip side, incentive payments are much smaller for people who have missed -- have not made their mortgage payment in more than six months. they may be beyond help so we do not want to incentivize it too much. i am wondering -- this is for all the panelists, but let me start with injury. does that leave us with many people? if we restricted to people reject first of all, they have to be fannie and freddie mortgages. second of all, they have to be delinquent out -- as of today or yesterday. they will not help people who

have not paid people in six months. some people have not paid in two years. how many of them are left it how much of an effect will this have? >> they are the dam it -- they are the ones with the numbers. we need a lot of tools to bar -- tools to borrow. for as many reasons, we need solutions potentially. to simply categorically said principal reduction will not be considered under any circumstance, it seems unnecessary. we are sufficiently sophisticated to be able to cross the solutions that a tests into account. the value of principal reduction relative to forbearance. put it at the end of the waterfall. it may only spare half of a million borrowers who might be helped in the aggregate on this and at the end of the day only

50,000 qualified, those are 50,000 people who are better off because principal reduction is offered than an alternative. to the extent to get a read performing asset on the box relative to be default rates and other things that are built into the model that everybody is using for hamp, to say everybody else has to use our numbers but we are not going to come i think that a somewhat problematic. it gets back to the basic notion of fairness that if every other servicer says -- have access to offer principal reduction would it make sense, i would like to see as much transparency on investor decisions. they are allowing their borrowers to use the principal reduction alternative to standard hamp waterfall, you can require the same without radically shifting behavior's in the marketplace. >> i guess i am looking for

agreement. tell me if i am wrong here. it seems like either of you would say there are no circumstances -- there are circumstances where principal reduction on an individual basis might seem like the right thing to do. can policies, can it be nimble enough to distinguish so that you pick the right ones. maybe it is 50,000, but you are not doing principle reductions for an enormous amount that changes their behavior, or even if it does not, can we equip policy nimbly enough. would it be your critique on it that there should be somebody we have that option for if we can target it well? >> it already has, previously and said, there is a whole host of households for which this will not work. people who are currently making payments on their mortgages and there is a reason doubt, people who are unemployed, it is very

difficult. there is a little wedge. the problem is so small -- is so small -- 14 different problems from the federal government. that does not include bank programs and fannie and freddie programs internally. none of these have worked all that well. what we are saying, but this time it will work -- no. i ask you to do more studies which mr. the marker said he will do. there is a wedge, but how big is the wedge? is government nimble? let's be honest. the federal government is about as nimble as a slut. are well intended but they move very slowly. -- they are about as nimble as a slug.

>> there is a time and a place for all of these choices. principal reduction is one of the many choices. there is also the ability to develop objective tests that look at various data an objective fashion as to make those decisions. are they perfect? no. is there any such thing as a perfect model? i would like to find what if i could. it should not be excluded. they should be used as one of the many things. there are some great benefits that have come out of much of this stress. in the old days, was there such a thing as a net value test? there was one choice and one joyce only. what was it? we will take you to foreclosure. -- there was one choice only. we did not do modifications.

it was a simple world. yes, the world is more complicated in response to what happened. that is a good thing going forward for the industry that we will be better at addressing the best way to handle these things. we keep talking about the problem -- i do not know if there is any single or multiple sets of policies that can talk about such a -- back and saw such a big problem we have other than time. the economy will get back on track. incomes will grow. what do house prices do when incomes grow? they grow, too. time has two you need benefits to it as a policy. the first benefit is it is free. the second benefit is we cannot really go wrong. these are two things that hinder us into developing policy today. how much does it cost and where did we go wrong? >> i want to open up for

questions. let's keep this nice and succinct. there is a microphone coming around. right there. >> i am the author of "10 billion foreclosures." i have listened very carefully. there is a gentleman -- i am sure he is listening as well. i listened to macro analysis and microanalysis to try to solve in terms of property value and the gap and number of potential foreclosures. what i do not hear is any thinking. i do not know -- i am asking for a macro number since we have backed off addressing unemployment.

i tend to think that is where the answer is. our state political economy does not allow us to get anything through the macro approach that will satisfactorily -- satisfaction trade deal with this problem. i do not think it will work. >> i would say we have not done anything on a macro level -- i think the employment to population ratio in this country has stalled. it has been that way since 2009. something needs to be done again, keynesian versus austria, they're different strategies on how to do this. the chairman has been very active in helping this problem out. pushing interest rates to almost japanese levels getting down to zero, we are in a liquidity

trap. nothing seems to be working. i caution you that -- the fed is throwing everything in the kitchen sink at this probe -- problem and nothing is pilot -- i am not sure what other policies would do the same thing. >> there somebody in the back. >> i t why for your comments. there seems to be some consensus that principle forgiveness should be at least one tool in the toolbox. the question i have is should this be subsidized. is chosen more frequently than the other tools? >> i think to the extent that we now have some of the analytics -- we will disagree how good the bottling capacity in the current time. is -- timepoint is.

hamp is not an optimization model. is basically a waterfall approach. you can decide to make principal reduction first and foremost, we reduce principal and let it go. the question is, after you reduce the interest rate, after extend term, what other options might you do with the residual amount of the value of the note. do you simply for bear or do you forget? that is where the policy comes in. i think saying we will only forbear is shortsighted. given the operational comfort that comes with the hamp process, it should be fifth in line in that regard. putting it after some of these other things that are less costly but potentially as effective for slightly under

water borrowers are slightly delinquent borrowers makes sense. again, you figure out where it fits in the process of a purely operational analysis at the pool level. >> we have already talked about keynesian and austrian approaches. i will talk about some welfare approach here. we talked a lot about what these things cost. we have paid them off to the fact that there is probably some benefit out there. we get the idea that your people get foreclosed upon. those homes are not less vacant. that is good for the existing homeowners around those properties. in theory, we should say, the subsidy should be equal to encouraging the benefit of society, right? the same could be said for any kind of modification or any disposition tool that prevents the foreclosure from happening.

there should be the welfare benefit to society that would offset the cost. stimulating the economy is all about saying, we believe there is a benefit to doing this. i think the problem that we land on is, we often do not talk about where measure these benefits and include them in the calculations. it is extremely difficult to know what they are. we want to talk about trying to get a better handle on measuring what the benefits of these programs are to society in a welfare economic framework. >> let's take one final question. >> i wanted to ask you how this might play out in the political season. there appears to be republicans against any kind of loan forgiveness, let the market work.

probably against a lot of other programs. there are some deft -- democrats in favor of loan forgiveness. >> the only thing that will say is, i will relate it back to the problem i discussed before is that the banner headline -- administration forces the market to do principle reductions. even if they are five out of 11 million households, i do not think anyone will read the second line of the story. >> alternative headline? >> i will leave it to editors to read the headlines. unfortunately you have to read a little bit into the details. that is the challenge from all of us as we see from the variety of opinions appear. housing is complicated, as are the solutions.

the differences -- even though you can see his all the way on the far right. >> i voted for carter. [laughter] >> i think the real issue is, as you can see if the sides are not that far apart. the number of people we are talking about is not staggeringly large. to the extent there is a possibility to provide relief that was previously unavailable, i think it is worth getting it right most of the time even if we do make some mistakes. the debate is, are the mistakes too great or to frequent for us to go down that path? i think the answer is no. >> before wrapping up by one to ask everyone to remain in their seats. i do want to thank director demarco for speaking here and also for staying for all the

comments. i want to thank my panelists for the conversation that ensued. thank you very much. [applause] [captions copyright national cable satellite corp. 2012] [captioning performed by national captioning institute]

>> news making day on the campaign trail today with rick santorum announcing he is halting his run for the white house. mitt romney picking up several endorsements, perhaps because of that. the endorsement of senator pat to me. he gets the endorsements today of the governor of iowa and bobby jindal from louisiana he will be speaking shortly from wellington, delaware. we will have his comments live about 20 minutes from now when they get under way. while we wait for that, a discussion on the role of the u.s. institute of peace.

it is from this morning cozy washington journal. it is 25 minutes. -- this morning's washington journal. the list goes on. joining us inside their brand new building is their president, richard solomon. somebody with a deep background in diplomacy efforts. one of your expertise is south

korean military relations. i want to bounce this headline off of the. south korea says north korea is about to test its nuclear weapon. what is your take on this? guest: you pick the one country where diplomacy is having a tough time. this is a failed state. is pretty isolated by its own actions. the military leadership thinks that having nuclear weapons -- this will protect them. they have impoverished the country. the chinese who are their one major supporters are begging them to open up the country but the military will not do it. they are a friend of instability because they have empoverish their people for so long we negotiate deals of various sorts. they repeatedly violate the

agreements. we are dealing with a situation where diplomacy does not have a very good record of success. host: the white house's strategy, has it failed? the white house is defending its north korea's strategy. >> it is important just for political reasons to make an effort. as the saying goes, we have sold the same horse over and over to the north koreans. if he will open up to inspection of your nuclear program, if he will stop reprocessing uranium or plutonium, then we will give you food aid or another was try to be helpful to your development. each time the deal breaks down the obama administration is once again showing that diplomacy

does not work. we are in a situation probably where containment and working with the chinese who are into the leadership, hopefully the chinese will convince a new generation of leaders that has just taken hold that their approach is not working. host: that is the headline on north korea we showed you were as the headline on the situation in syria with cross border attacks yesterday into turkey and another country. is the usip working in north korea and syria as a way of talking about what is the role of the united states institute of peace? guest: we were set up by congress, primarily the senate, in the early-1980's. we were set up in the shadow of the vietnam war. the feeling was if only we could strengthen our diplomacy, our use of political measures, we would not always have to send

in the troops. in the over two and a half decades we have been in business we have developed approaches to dealing with a variety of conflicts around the world using political means. we are at a major break point in history. on the -- about the cold war, where we confronted in. -minded states, major armies, and where diplomacy was state- to-state, we are dealing with a world where non-state actors, terrorist groups, religiously- oriented movements better, in a sense below the state activity, and our having an impact. we support our military -- military, which looks to us to try to negotiate situations that will get them out of a fight, as we have done in several insisted in iraq, and to train local people, whether it is iraq war afghanistan or elsewhere,

to deal with their own conflicts by political means so we do not have to be drawn into a fight. today, the situation in syria is very dangerous. you will hear very shortly from steve heydemann on our staff who is running a working group trying to figure out ways to deal publicly with the syrian situation. there is an opposition that is not well unified. we are trying to help them approach their dealings with the president assad regime, hopefully, for some kind of negotiated settlement of the conflict, but it does not look

like it is headed that way right now, and, indeed, it might be escalating as turkey, lebanon, and others on the borders of syria provide shelter to opposition fighters. host: i want to show our viewers the budget for the united states institute of peace. in 2010, 49 million. host: what do you do with that money? guest: we run a range of programs related to conflict management. we do research on best practices and managing conflicts. we train people abroad. we train our own people. one of the things we have been very active with is working with our military, starting in 1994. we were asked to start training marine war fighters for peacekeeping operations. that is an activity we have been very active in.

we trained civilian police to go in as they did in possible after the balkan war to stabilize local committees to reestablish several government. we train local people to try to manage their own conflicts. we convene on a bipartisan basis experts to work on serious problems of national security. you may have heard of the iraq study group that was led by former secretary of state james baker, and former congressman lee hamilton. there bipartisan group looked at ways to be escalate our involvement in iraq. we've done studies of genocide prevention, u.n. reform, and a variety of other bipartisan assessments that in a very polarized political environment are valued for their professionalism and bipartisan

quality. so, our budget is pretty minimal. it is about 12 cents a year per american. it is one-tenth of 1% of the state department budget. our work seems to have a significant impact, even though our budget is pretty minimal. host: private donations? guest: we can not use private money for our programs. the only private money was for our building and our new building. one-third was paid for by private donations. to keep us bipartisan, congress has legislated the only appropriated money out of congress can find our programmatic work. host: so, the total price tag for the new building you are in this morning? guest: right. the basic construction was about $160 million. one-third of that was private money.

the architect did a brilliant job. everybody seems very, very pleased with this building. we are right opposite all of the war memorials at the northwest corner of the mall. we call this the war and peace corner of the mall. we are here both as a symbol of our country's effort to try to deal with the world by peaceful, political means, and, of course, we are reworking center. earlier, you commented that we are just across the river from the pentagon. we're not far from the capitol building, the state department. we are a convening point. one of the strengths as we bring together people from different government agencies, from the humanitarian assistance ngo's and international organizations that need to collaborate in dealing with conflict situations in today's world.

in that sense, we help to bridge the stove pipes, so- called, of the government bureaucracies that tend to work in their own bureaucratic frameworks and helped to build a civilian capacity for dealing with international conflict. host: phone calls. randi, a democrat in illinois. caller: basically, he said they're not allowed to except private money, but one-third of the money was donated to build the building, but is his view against the war machine, or is it another government agency? guest: the private money is only allowed to finance the building. congress made an exception on the issue of private money so that it only applies to the building project and

hospitality. programmatic work is so we funded with government money. i'm sorry your second question was? host: he was wondering do you go up against war, that was the wording he used. guest: everyone wants to go against war, but the reality is our military head valued our work. some of our biggest supporters include admiral mullen, and others we have worked with because from a military point of view if we keep troops out of a fight, we will save lives, and as we have been doing in iraq, afghanistan, if we stabilize the situation as politically, our troops can come home, and the military values that collaboration host: mr. solomon, -- collaboration. host: mr. solomon, because you

get federal money, can the usip to take positions on u.s. policy, the afghanistan war, the iraq war -- can you take positions against those things? guest: we are and applied operation. our work is practical. it is on the ground, designed to limit violence and stabilize situations abroad, countries that have been torn apart by war. we belong to congress. we are not part of the administration, that is the state department or the defense department might even though we collaborate with them. our position is floating between the bureaucracies, operating in a bipartisan way. we feel that is one of our great strengths. host: richard solomon, the state department is just up the

street from where you are located. let's go to joe in missouri. caller: good morning. thank you to c-span for bringing this to us. that is a beautiful building that you might equate to the taj mahal, as i understand cost $100 million of taxpayer money. how many people work there, are the salary by the american tax payer, and what is this man's salary? how many -- how much the people get a year? is just another bureaucracy? guest: we are a small operation. we have a little over 200 people working here. if we make generally less than people in some of the big iraq persist.

yes, this is an attractive building -- bureaucracies. yes, this is an attractive building, but ask yourself, across from the war memorials, would you want a third-class of attractive building? we are here to say that the new -- the american people want a more peaceful world. her from a national point of view, -- from a national point of view, this building says something important about our work, and we have had a lot of support for not just the work, but effected we are no longer just working out of commercial rented space. host: the caller also asks, are salaries paid for with taxpayer dollars, including yours, and can you share with us the amount?

guest: the answer is yes, this is taxpayer-supported salaries for our people, but we work for the congress, and our salaries are within the general federal pay scale. my income is at the executive level. i make something less than the secretary of state, though we are paid with taxpayer money. host: who do you answer to in congress? guest: we are overseen by several congressional committees, foreign operations in the house and the senate, and our were busy getting waited every year. we have to make our case -- and our work is evaluated every year. we have to make our case. we have found we have strong support in the house and the said. host: here is a tweet --

guest: we do so. we have internet sites. we use modern electronics precisely to encourage that kind of coalition-building, networking, however you like to put it. it is where the world is headed, and our objective is to mobilize people that want to promote reconciliation. we do work with religious communities in the middle east. we work with people who want to bring about peace in that troubled region. in that way, we, hopefully, stabilize the areas that otherwise would blow up, and lead to security problems for us and our friends. host: mr. solomon, another tweet.

host: before you respond, there have been critics on capitol hill. here is congressman jason chaffetz from may, 2011. [video clip] >> i do believe we should defund the united states institute of peace. i believe every department, every agency stands for and fights for peace. we do not have to have some separate organization that is built on peace. it is the department of defense, it is the state department, it is every agency that fights for peace. that is what our country stands for. we do not need a separate organization. we have spent over $700 million on this think tank, and while their intentions are good, quite frankly, we cannot afford, and we do not need. it is the primary mission of the state department to achieve the peace. ball that's something we off to some separate agency in a fancy building.

if the state department is not fighting for peace, that is a discussion we should have, but it is not the only agency that fights for peace. we all fight for peace. host: mr. solomon, could you please respond to the congressman? guest: they did make the case we just heard. it was vigorously debated. the outcome at the end of last year's budget discussions was that the institute makes an important national security contribution. we supplement the work of the state department in the defense department. these agencies asked for our help. in a moment, you will hear about our work on syria and the afghan-pakistan situation. as i said much earlier, the world has changed dramatically. the state department is structured for state-to-state diplomacy.

our work, in a sense, works in an environment dealing with non-state entities, training people to work together collectively for deployment abroad, and both state and our defense people value that contribution our work, reflects, again, the way the character of international conflict has changed dramatically. again, our supporters in congress made it very clear that they value our work. earlier, the question was where did we come from? again, we were set up in the shadow of the vietnam war. a searing conflicts for the american people. the objective in the late- 1970's, early-1980's, was they wanted an institution that would do research and training -- things the state department and the defense did not do to

come up with political approaches to dealing with conflicts, and after the cold war ended, it turned out that our work became all the more valuable because conflicts were of such a different character. host: memphis, tenn., a republican down there. go ahead. caller: mr. solomon, i just have a question in regards to the peacekeeping efforts. i find it interesting that you have an institution that is established, and of course you mentioned the emphasis placed on peace in iraq. it seems ironic that as a result of those efforts the u.s. ultimately ended up engaging in a 10-year war. what would be the current outlook in many other world

issue that can take us in a direction that will not ultimately end up in wars since this institution and other organizations are centered around peace? thank you. guest: it is a good question. our work today in some of the most troubled areas of the world like afghanistan are designed to get conflicts under control so they do not end of being a fight we have to get in the middle of. howard will lovelock program tries to establish legal procedures -- our rule of law program tries to establish legal procedures to manage conflict. in iraq, land conflict grew out of policies that created enormous tension. we helped the local people establish a tribunal and arrangements where they could adjudicate these land disputes

rather than shoot at one another. i could give you lots of examples. our work is to try to find ways to get these areas of conflict below the level of state-to- state confrontation, under some kind of political control, and minimize the need to send in our own troops. host: glenn is an independent in brooklyn. caller: i am less concerned about the salary being received by these professionals. i just want to be sure that they are, in fact, promoting peace. can you give two specific examples of prevention that your agency dealt with are the last five -- over the last five to 10 years? and by extension, how do you

exploiting the long conflict in iraq and afghanistan if there were efforts on in the scenes to prevent such conflicts. guest: good question. let me give you one example from iraq. we were training iraqis to try to deal with their own in a religious conflicts, again, by political means. and there was a situation in the city of baghdad some years ago where people were stirring up trouble between shiite and sunni students. some of the iraqis we had train went into the university area and got the students talking with each other and they calmed down what could have been a very violent situation. i mentioned a minute ago the land disputes caught we are helping true with traditional means.

given that our budget was pretty minimal, again, one-tenth of 1 percent of the state department, where we have our people working in the field, they feel a signal to impact. and our military is a good example of where our work to supplement the work of the major bureaucracies. we were trying to stabilize the situation in a way that the general patraeus said was very helpful to stabilizing an area south of baghdad and enable him to redeploy his troops and basically eliminates casualties for american military. these on the ground programs having the kind of affect where the big agencies are securing diplomacy look to us to

supplement their work. >> host: our guest is the president of the u.s. institute of peace. he has served in that position since 1993. prior to that, he worked on asia pacific affairs from 1989 to 1992. he also served as u.s. ambassador to the philippines. he coordinated the closure of the u.s. naval bases and worked in the region for a bilateral regional security negotiation and that helped to negotiate the cambodian peace treaty and had a lead role in the dialogue on nuclear issues between the united states and south and north korea. he is joining us from inside his permanent home at the u.s. institute for peace. from the balcony you can see just over the tree are in there, the pentagon. it is over the river. but we will try to get in here a couple more phone calls.

grand junction, colorado, sandra, a democratic caller. you are next. caller: good morning and thank you for taking my call. i'm wondering if there is any kind of regular newsletter or some publication that might be put out that will allow us to see exactly who gets what and why and how much. new >> the best way to track what we are doing -- guest: the best way to track what we're doing is to go to our website usip.org. that lists all of our programs and you can follow all of our programs because they are video streamed on the website. in addition, we publish a range of reports available to the public, either without charge, or in the case of our books, at minimal cost.

we are out there in the public. we are delighted to have this opportunity to talk about our work and to respond to some of the questions we've heard. > >> we are live in and look -- wilmington, delaware at the construction plans. mitt romney is going to be speaking this evening. this is the first opportunity will have to hear from candidate mitt romney since the announcement this afternoon by rick santorum that he is ending his campaign for the presidency. mitt romney holding a town hall here at rcs fabricators. rick santorum made the announcement midafternoon and had actually called mitt romney to let him know about the announcement. it ran about 15 minutes.

candidate brahney also spoke after that about rick bazell -- candidate romney also spoke about quicksand form, saying that he was an important person for our nation. he also picked up a couple of endorsements today. >> it is a great day to be in delaware. [applause] a want to introduce myself. my name is jeff craig. today was the announcement day for myself and the lieutenant governor candidates on the republican ticket here in delaware. [applause] we started with an announcement of and in the sussex county, a new event in kent county. and as we are speaking, we have an event scheduled for new castle county. the romney campaign was kind enough to out -- to allow me to address you, and we have moved

our then back to after this event. we would like you all to come to the fire hall when this is over. [applause] i also wanted to take this opportunity to talk about one of the more important things today, that is, my support for mitt romney as the next president of the united states. [applause] thank you.

>> on the left of your screen,

that is a former republican congressman mike castle who lost a primary election to khristine o'donnell, who fell to chris itunes to be the other cell -- senator from delaware. this is at the fabricator plant in wilmington, delaware. we are waiting to hear from mitt romney. he was scheduled to get under way about 10 minutes ago. his campaign bus has arrived and the event should get underway shortly.

>> this is the first of a couple of chances you will have this week to hear from mitt romney. we will hear from him on friday as he speaks to the national rifle association meeting on friday at 2:00 p.m. eastern.

newt gingrich is also scheduled to speak to that group. rick santorum had been scheduled to speak to the nra group. as you probably know, he has stepped out of the race from -- for the presidency, announcing in gettysburg debt he is suspending his campaign. -- that he is suspending his campaign. meanwhile, mitt romney picked up the support from a couple more governors. louisiana and iowa. he also picked up the support of the other pennsylvania senator, pat toomey. rick santorum leading 285 delegates -- leaving 285 delegates on the plate as the campaign continues. mitt romney has 661 delegates of the 1144 needed for the nomination. and rick santorum making the announcement two weeks ahead of the april 24 pennsylvania primary.

[applause] [applause]

>> i am the ceo of r.c. fabricators. i want to thank you for coming today. i am pleased to introduce laurie brace and, also a woman business owner and executive board member. she will introduce the governor. [applause] >> the first of all, i want to thank r.c. in that they invite all was to be here today. recently, in the past half-hour he has been meeting with about

12 of us women business owners and i want to say thank you. as a business owner, i'm very interested in jobs for the people who work for me in my business and also has a mother for my children. mint told us he was interested in the business climate and making it better for us. i want to thank you for that. and i want to encourage other women. this is our future president, ladies and denman, mitt romney. [applause] -- ladies and gentlemen, mitt romney. [applause] >> thank you. thank you.

your very kind. this has been quite -- wow, thank you. [cheers and applause] thank you. the only time i typically get a standing ovation as when there are no chairs. [laughter] i appreciate the fact you gave me such a welcome. it is an honor to be here in this facility. this has been here a while and there is some heavy equipment here. this is a fabrication plant and they make steel beams and girders for building various buildings. business has not been as hot as it was in the past decade, but it is coming back slowly but surely. becky, thank you for opening your shot, and also laurie for

opening -- for introducing me to the women business owners as we came together. this has been a good day for me. [cheers and applause] senator santorum has decided not to proceed with his campaign and i had the chance to speak with him this morning. we exchanged our thoughts about going forward, and we both have a great deal of interest in seeing the country taking on a different path. he has made an important contribution to the political process, has brought forward issues that he cares very deeply about, and has been able to gather a great deal of public support and interest to those issues. i look forward to his work in helping assure victory for republicans across the country in november. if we have got to get that job done. [applause]

the reason that i wanted to meet with these business leaders was to ask them about their enterprises, what the prospects are for them, what they are seeing in the marketplace. but also to get a sense of the administration's policies and the government's policies as they relate to small business. as you might expect, those policies have by and large been devastating to small business. we spoke about the president's failure to encourage small business. i would also note, to be able to encourage enterprises that are owned by women, and to call create job creation more generally. the other day there was a talk about the war on women. the real war on women has been waged by the obama administration's failure on the economy. [applause]

do you know what percentage of the job losses in the obama years have been casualties of would been losing jobs as opposed to men? what percentage of the job losses were women? 92.3% of the job losses during the obama years have been women who lost those jobs. the real war on women has been the job losses as a result of the obama economy. and if we're going to put women back to work and help women with the real issues that women care about, good jobs, good wages, a bright future for themselves and their families and their kids, we will have to elect a president that understands how the economy works, and i do. [applause]

i see one of my supporters over here, christine o'donnell. good to see you. [applause] the president is so out of touch. i do not think he knew that number. and if he did, he probably would not have said his administration has been a great success. he says he has not only done a good job, but a great job. even with a 92.3% of the job losses being within, -- being women, he thinks he's done a great job. and he said that on saturday night live. [laughter] he said that to the main street -- mainstream media. and if you look at the administration and the last three and a half years and you can see that something is wrong

with his perspective. not only have 92% of the job losses been among women, but you have seen 800,000 people overall values -- home oflum the lawyers have declined. the median income for the average american has struck by 10%. homes of been foreclosed upon. the president's policies have not worked. he said his stimulus work. that was three and a half years ago. he barred $787 billion and said he would hold unemployment under 30%. he said by now we would be below 6%. you have failed. we have seen it. you cannot hide it. we are going to change it. [applause] there is one place the president

has delivered. he said his energy policies would cause energy prices to skyrocket. he was speaking to a group of newspapers the other day, publishers and owners, and he said that this is going to be a defining election. this is going to be a critical election that will determine the course of the nation. not just for a year or two, but indefinitely. this is not an election, in my view, about a person or a party. it is an election about the direction of america. we are going to have to -- [applause] we're going to have to ask ourselves what it means to be american today and in the future. we will have a choice between

two paths, one which is outlined by our president, which is a government centered society, where government calls the shots, where business is the bad guy, we pick up these scapegoats to attack. but a government centered society. then there is the other view, the view that is laid out by this -- by the founders that i subscribe to. america is the land of freedom and opportunity. [applause] i will ask you four questions in a moment. if you have questions that you want to ask, i will do that and do my best to answer them. but a couple of thoughts about government-centered society in contrast with a nation that is free and filled with opportunity for entrepreneurs. one of the onta and doors was talking about how she and -- one of them was talking about how she and her husband started a

business some years ago. just sitting around the kitchen table they took out a piece of paper and said, wouldn't be something to learn more about upholstery? and her husband took an upholstery class. and decided to start a business upholstery and goats. now they decide -- now they employ dozens of people in a business that makes upholstery. it is amazing, the entrepreneurial, innovative spirit of america. and their success does not make us poorer. it is time for us to have a president who will not apologize for success at home and will never apologize for america overseas. [applause] between these jiabao visions of a government-centered society

and a free -- between these two visions of a government-center study and a free society, you have these two things. you have a government and with a trillion dollar deficit ultimately sink our economy in the future. i will cut the rate of spending. i will capet and i will finally get us to a balanced budget. [applause] under this president, will have a health-care setting where the government tells you what kind of health insurance company you must have, and i am convinced, which treatments you can receive and which ones you cannot. if i am president, i will get rid of obamacare and return the responsibility of health care to you. [applause]

this is a president who said that it comes to energy. it is clearly does not like coal or oil or natural gas. he is for all the things that are above the ground, solar and wind. but the stuff beneath the ground he is not for. i am for all of it, above and below. i will get the energy security for this country and i will build that pipeline from canada. [applause] government-sident's centered society, they love to talk about the economy and they want the economy to do well. they just do not like business very much. what they do not understand is that the economy is nothing but the addition of all of the businesses of america together. that is what makes the economy. saying you do not like business

is like saying you like, that -- like armlets, but you do not like eggs. -- like you like, but do not like eggs. you know the president wants to take the tax on small business from 35% to 40%. you may say, i don't understand what you are talking about. let me point this out. the percentage of american workers who work in businesses that are taxed at the individual tax rate is 54%. a 54% of american workers work in businesses? as individuals. when the president wants to raise the individual tax rate, he is raising taxes on small business. and as he does so, he will kill jobs. and then there is another tax idea floated out by vice

president biden. some of us call him the gift that keeps on giving. [laughter] you know him well. [applause] he is proposing a global tax for businesses. i'm not sure what he has in mind, but i'm sure it will kill jobs. if you raise taxes on working people, you hurt families. when you raise taxes on small business, you kill jobs. that is what they are doing. in the name of fairness, they are killing the opportunity for americans to have a fair shot of a good job at a rising wage. we will put americans back into good jobs by stopping the attacks madness. -- the tax [applause] madness] and i see a member of -- the tax madness. [applause] and i see a member our armed

forces. i appreciate your service. [applause] thank you. the you know the state of our military readiness right now? our navy is smaller than any time since it was founded in 1917. our air force is smaller and older than any time it was founded in 1947. by the way, the 1917 number is not when the navy was founded. it is any time since 1917. and the air force, since its founding in 1947, is smaller and older. our troops are stretched to their breaking point. going back to iraq and afghanistan and multiple the point is, our president wants to cut the number of ships,

aircraft, and personnel. my view is that the strong america is the best for an allied peace. i will add to our military and give our veterans the care that they deserve. [applause] this is a defining election as to what course of america will take. will it remain strong militarily? will we be committed to low taxes and to growth, jobs, higher incomes, will we preserve a americans' freedom and opportunity? will we encourage small business or crush it through more regulation of like obamacare and dodd-frank and sarbanes oxley and one thing after another ?eche i'm convinced that we will need to do something we should have

done three and half years ago, and that is, to elect a conservative president for the united states. i intend to be the president with your help. [applause] let me turn to you for any questions you may have. those of you that are in the sun are going to have a hard time. this is just a test. the detectives always put you in the sun to get the real truth out of you. yes, sir? there is a german right back there. hi, there. -- a gentleman right back there. hi, there. >> there's a lot of discussion on individual tax rates in this discussion, less about corporate tax rates. i know your plan would take it down 25%, but what additional steps would you take to get competitive and bring some of those companies back home from other countries? >> those that are not familiar with this, some countries have figured out that business is a

good thing, not a bad thing. and if they have tax rates that are lower, it might come out over time, -- it might over time, encourage businesses to grow there. with the highest tax rate in the world, we are encouraging businesses to leave. we have to be more competitive. we have to bring our tax rate down toward the european level. can you believe that? get our tax rate down 25% -- down to 25% and then have some of the deductions and so forth that have been worked into the code over the years. there are other things we can do. this is a strange one. only government could come up with this idea. let's say, you have a business with construction equipment, like caterpillar. and you decide you are going to build a factory in china to build equipment there.

the will not ship it back to the u.s.. it is too heavy. you'll try to keep it there and compete in china. you will ship the designs are there. and you are over there in a factory and it makes money. you pay chinese taxes, of course, because you'll be competing with the chinese construction equipment company. but if you want to bring money home to america, we will tax you for bringing it home. up to that 35% rate. if you want to keep it in china, you do not get tax by america. think what companies do. they keep it outside the u.s. it is estimated that over a trillion dollars in profit is held outside the u.s. because they do not want to bring it back and get hit with what is known as the repatriation tax. that makes no sense. bring money home. let it come back to create jobs here. make the businesses grow here.

[applause] that is one more change. thank you. yes, ma'am? >> i really have more of a comment appeared to be this, and you're going to have to go nose to nose and toaster toes with all of the untruths. it has to do with the data that is out there. i hope you're willing to do it, and that your campaign will do it. [applause] >> i heard a shout over there, give 'em hell.""ghanem hel the truth came out as he spoke of pres. medvedev in russia. he said, i can be more flexible. you do not say that to the head of russia without making it clear to anyone listening that you have planned after your

reelection that are different than those you are telling people during election. it will be a hide and seek campaign. we will find out what he is going to do. i think we have some idea because of what we have seen in the last three years. [applause] thank you. yes, ma'am? >> [inaudible] >> for those who could not hear the question, what can we do to get more refineries in the u.s.? we will build refineries if there is oil to refine here. but if we continue to make it harder to get oil from here or from canada, why build a refinery? there is no particular need for it. the marketplace and competitors will build refineries if they are needed. and if there is raw material, namely crude oil that can be processed. we have a president whose administration has reduced the

number of licenses that have gone on federal land to drill by half. and he has reduced the number of permits to drill on federal land to one-third of what they need to be. we are not drilling for the production we are going to need tomorrow. therefore, people are not building -- people who build refineries and pipelines and things like this look at it and say, we will not need these because we are not ruling out. and this president has an have out -- and add out talking about how oil production has risen during his presidency. that is thanks to the prior president. and then he blames someone for higher oil prices. guess who he claims? he blames me for the high price of gasoline because i do not want to raise taxes on all oil companies. i do not like raising taxes on anybody. this president goes around and

tries to find some group of americans that other americans may not like a lot or trust a lot. then he says, let's tax them. it is their fault. this plane, this trying to divide america is not only wrong, it is dangerous. we are one nation under god and united we will stand and lead. [applause] >> how many czars do you plan to have, or do you plan to return to the good -- return the government to only three branches? >> i cannot imagine using that term. it is just amazing. the obama administration has added about 135,000 government workers. that is a lot people. it these entrepreneurs here, they do not begin to employ that many. it is a huge number of people. and the problem with 135,000

more government workers is not just that they have to be paid and have to get retirement benefits and pensions and so forth, but they have to do something. and they do. they intrude in your life. they audit you, inspect you, regulate you. there are too many government workers. [applause] i look forward to eliminating government programs, not just cutting them, getting rid of some of them. do you know how many job training programs we have? we need job training programs for people who find themselves out of work and need new skills and get new kinds of jobs. but we have 49 different job training programs at the federal level. and a report to eight different agencies. think of the administrators, the bureaucrats, the salaries, pensions, the health-care cut. it is just outrageous. i would take all of that money and i would give delaware their fair share and say, you use this

to train your own people in the way you and delaware think best. [applause] >> my name is roxene wagner. it is a pleasure. i hope this is not inappropriate, but have you chosen a vice president? >[laughter] >> i'm here to announce today -- [laughter] -- that i do not even have a list. this decision by senator santorum is unexpected. we will begin thinking about that at some point, but i cannot tell you when or who because we have not made those decisions yet. a lot of these decisions about the campaign going forward, we will be thinking about that this week and making a number of decisions. i have been thinking about process, not individual names. i do not want to get started too

quickly, but are you available? [laughter] yes, sir? >> as a 19-year-old american, i'm sure everybody knows about gasoline. as the president, hopefully, what are you going to do -- opec, if there is something happening in part of the world, they decide to make announcements to make it go crazy. also, donald trump has made comments about how opec is ripping us off. it has become more clear. as president, what would you do? >> i would take advantage of the oil resources we have here and allow additional drilling and provide licenses for additional drilling on federal lands. i would also build a pipeline from canada so we get more

supply of oil here. i would take advantage of natural gas. natural gas has come into its own in a big way. [applause] it sounds like you already know about this. we have always been able to grow vertically into the ground. but now we can go vertically and horizontally. as they go horizontal lee, they can tap into pockets of natural gas, or oil. and by pushing fluid into the pie, they are able to push the oil out. that is called fragging. this technology has allowed us to get 100 years of additional natural gas. it can be piped to our transportation networks on the interstate highway for long-haul trucks or fleet inside cities. it weakened the event of our oil resources, gas resources, coal resources -- we can take advantage of our oil resources, gas resources, coal resources. we always say, this is great that we will not have cars that

require oil. yes, it requires coal. half of our electric energy comes from coal. these are the things i can do to get the price of gasoline where people can afford it again. one of these women here describe to me her business and the fact that they have a fleet of 70 trucks. when gasoline prices go up by 25 cents or 30 cents a gallon, that makes a big difference. because trucks do not get 30 miles to the gallon. we will have to get serious about taking advantage of our energy resources. and by the way, in case you did not know, i spent my life doing what these women are doing. i spent my life in business. i understand why jobs leave. i understand why it is government is such a burden in various types of businesses.

why is that government kills jobs. my objective is to make government the ally of jobs, the ally of small business, and encourage job growth. [applause] >> mr. romney, if the supreme court upholds obamacare, when you are elected president, what are you going to do? >> well, one, we will not be very happy with them. but i actually believe they will do the right thing and overturned a obamacare. i certainly hope so. [applause] i agree with those justices that ask the questions. even justice prior ask a question about who could read this thing back to thousand 700 pages, how could the court piaster read such a thing?

-- who could read this thing? 2007 hundred pages, who could read such a thing? he has been giving waivers to obamacare to various unions. i will take that idea and give a waiver to all 50 states, so they do not have to follow obamacare. [applause] because some states will not accept that waiver, i will also have to get it repealed. let me tell you, i will not replace it with nothing. we will work piece by piece to find ways to bring the cost of health care down so it is more affordable. families are having a harder and harder time, particularly if someone in the family is ill.

there are things we can do to get the cost of health care down, and they must be done. there are some things i would like to do, but piece by piece. we cannot afford trillions of more federal dollars. this kind of deficit spending must be stopped. [applause] you got a young lady behind you. >> if you are elected president, besides obamacare, have you compiled a list of priorities that you will do in the first days of your administration? >> thank you, and it is a long, long list. i will not take you through all of it. let me tell you some of the

things i would do by executive order on day one. one, i will grant a waiver for obamacare. number two, all of the obama era of regulations i will put a hold on and remove those that killed jobs. [applause] 3, i will remove corporate tax rates. four, i will label china a currency manipulator, which allows the president to be able to crack down on where they have stolen intellectual property or have had a unfair trade that kill jobs. to me, this is about getting our economy going again, short-term and long-term. those are some of the things i would do right off the bat. then other things. we've got to repeal sarbanes oxley, dodd-frank, obamacare. we have a long list.

[applause] i want to take the top tax rate that americans pay and i want that about 20% of where it is now. how will i pay for it? i will limit the deductions, particularly for high income folks so that the high-income folks pay the same share they now appeared on not looking to lower taxes on the wealthy, as the democrats always charge. they will share the -- pay the same burden a share now. but by lowering the marginal tax rates, that helps small business. instead of paying 35% tax rate, they will pay more. these are the kinds of things

small businesses need to do to grow and add jobs. we have to understand that we are in competition. i am told that your time is up and my time is up. we are in competition for jobs. we are in competition for the best jobs. we want to rising incomes. we want our economy to be so strong. and by the way, that means all of our businesses, to be so strong that they will form the strongest military in the world. we want to have the best schools in the world. we do not. we want to care for veterans and seniors in the best way imaginable. we want these things to be once again the american experience. we will have to work hard to encourage enterprises to get them to grow again, to get them to highere here. everything we are doing from education policies to labor policies to tax policies, we got to encourage enterprise.

this is not hard. the we have this dichotomy. the president is looking for someone to blame for his own failures. he is looking for some group to blame tuesday, let's tax the people, let's regulate these people. we want to lift all americans. that is the right course for america's future. [applause] i love this country. i love america. don't you love this country? i love this country. [applause] the founders were eager brilliance -- either a brilliant or inspired, and probably both. they said the creator gave us our rights, not government. and among those rights were life, liberty, and the pursuit of happiness. we will be free in america to

pursue happiness as we choose. this freedom, this opportunity to bind -- to define america as a nation, these guys in washington do not understand that. they think that government bureaucrats, smart as they are, can live our lives better than we can for ourselves. they are wrong. free people choosing free enterprises have built the strongest economy in the world and the greatest nation on earth. this is not time for government. this is time for free people. i will restore america's freedom and get america strong again. thank you so much. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] ♪ ["born free" by kidd rock] ♪

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>> rick santorum announced he was stepping out of the race for president. he made that announcement in getty's board -- gettysburg.

this is about 15 minutes. gettysburg, such a historic town. first and foremost, i want to thank everybody for the outpouring of prayers over the past weekend. we had a difficult weekend. good friday was a little bit of a passion play for us with our daughter, bella, who is the joy of our lives, getting,

unfortunately, very sick. she is a fighter. she is doing exceptionally well. she is back with us and the family. we look forward to spending a lot of great time with her. but it did cause us to think. as the role that we have as parents in her life and with the rest of our family, this was a time for prayer and bought over the past weekend. just like it was, frankly, when we decided to get into this race. my wife and i and the kids sat at the kitchen table and talk about our hopes and fears and concerns. we were very concerned about our role as being the best parents we possibly could be to our children and making sure that they have a country where the american dream was still possible. i think a lot of concern that we had for our family was that, what was going on in washington, d.c., and all the

problems that you've heard me talk about on the campaign trail, that the american dream was slipping, not just from the hands of average americans, but for all americans, that that dream was slipping away. as the parents, that we ought to go out and do what we could take and that responsibility for our children and for children across this country. we started out almost a year ago now. i told my story, our story of our family, my grandfather, who came to this country and worked in the coal mine. my father, who served our country in world war ii. we have talked throughout the campaign about my stories and the stories of our family.

after a while, it became less about my stories and more about what -- what kept us going were your stories, the stories of people across america that we had the privilege of getting the chance to know and to interact with. when you travel around -- one such story was a guy named chuck who had a pickup truck, who joined our team. drove around for months in his dodge ram truck because he believed that we had the best opportunity to turn this country around. i met a lot of folks in iowa that i will never forget. a man of strong convictions welling up with tears, about what is going on with our country, particularly national security.

the constitution is one of the vitally important legs we have forgotten. people like wendy, our best volunteers. she passed away shortly before the caucus. she is someone i remember, her passion for the least of us. those of us on the margins of society, as many would have looked at her. even today, it is because of our daughter, bella, folks came to our rally one after another. children in wheelchairs saying, "i'm for bella's dad." just a beautiful idea of not my story, but their stories. told to forget it, we were still winning, touching hearts and raising issues that people

did not want to have raised. a young man came to our first event in oklahoma. he had spina bifida. he wanted someone who spoke about people who are overlooked by society or do not seem to be as valuable as others in society. folks like the duggars, the duggar family who traveled with us in their bus and gave us their time and energy because they believe in the importance of having strong families as part of a strong country.

we cannot have a strong economy, as you have heard me say over and over, without strong families and a strong moral fiber that makes us the moral enterprise that is america. even on things like a sweater vest -- [laughter] amazing thing, that sweater vest. it happened on a night i was doing in a bent for mike huckabee -- doing an event for mike huckabee. i gave a pretty good speech that night. all of a sudden, the twitterverse went wild, saying "it must be the sweater vest." from then on, the sweater vests became the uniform of the campaign. we sourced it to a company

making them in united states. we went to that little company in minnesota in the middle of winter. it was a beautiful day. we got a chance to see that little plant that had been around for almost 100 years. it turned out where the best customer that the mills there have ever had in their history. it has been a wonderful story after story of people who have come forward. those who put together a song in tulsa called "game on." over 1 million hits on youtube for that catchy little tune. even those who want to make it a winner-take-all primary. it has been inspiring to me, the stories that we have been engaged with. it turns out that it really was

not my voice i was out communicating. it was your voice, the voice that you gave me from the stories and experience i had. people say, how did this happen? how were we able to come from nowhere? it was because i was smart enough to figure out that if i understood and felt at a very deep level what you were experiencing across america and try to be a witness to that, tried to beat an interpreter of that -- be an interpreter of that from your voice be heard and miracles could happen. mircale after -- miracle after miracle happened. i want to thank god and thank you for everything you have given. a voice to those who, in many

cases, are voiceless. have tried to be a witness not just for your stories and your voice, but to provide a positive vision, not an negative campaign. we did hundreds of town hall meetings. we were not trashing anybody. we painted a hopeful and positive vision for our country, one that was based on how we could get this country turned around, not just economically, not just economically, but reflecting the hopes of americans, not just the fears of americans. the hopes of americans confronting the violent, radical islam, the surge of iran, what we could do to take on the problems of a sluggish economy as washington has grown so big. we put forth a solid and concrete plans, many of which came from the people i had an opportunity to interact with throughout the campaign. we did focus a lot on the families, and the dignity of

human life and a moral enterprise that is america. one of my favorite articles was one that joe klein wrote. "rick santorum's inconvenient truths." we talked about how we would build a country from the bottom up and we carry around our copy of the constitution. that got the tea party folks excited. we talked about the operator's manual of america being discarded by those in washington. i tried to bring to the battle what abraham lincoln brought to this battlefield back in 1863, november 19. he talked about this country being conceived in liberty and dedicated to the proposition that all men are created equal. he was quoting the declaration

of independence. we talked about the declaration as the heart of american exceptionalism. we will never be a country that can go forward as a great and our book country unless we remember who we are -- great and powerful country unless we remember who we are. that is what our campaign was about -- what made as americans, how we built the country from the bottom up, how we could be successful in the future, how we must believe in ourselves and leave in the ability to go forward and do the same thing. against all odds, we won 11 states, millions of voters, millions of votes. more counties than all the other people in this race combined. we spread the message far and wide across the country. what we found is support and a deeper love for this country. every state that i went to --

everyone who follows as around would hear me say, i love this state. it was a love affair for me, seeing the differences. seeing the wonderful people of this country who care deeply about where this country is going, who care deeply about those who are out there feeling left behind and, in some respects, feeling hopeless. ladies and gentlemen, we made a decision to get into this race and our kitchen table, against all the odds -- at their kitchen table, against all the odds. over the weekend, we made the decision that this presidential race is over for me and we will suspend our campaign effective today. we are not done fighting. we will continue to fight for those voices. we will continue to fight for the americans who stood up and gave us that air under our wing that allowed us to accomplish

things that no political expert would have ever expected. there is a lot of greatness in this country. we needed leaders who believe in that. who are willing to give voice to that. who are willing to raise us up instead of trying to provide for us and do for us what we can better do for ourselves. that is the message that came to me. it is one that i feel very good about continuing to talk to americans about. i walked out after the iowa caucus victory and said game on. i know a lot of folks will now write game over. but this game is a long way from over. we will continue to fight and make sure we defeat president barack obama, that we when the house back, and that we take the united states senate, and we stand for the values that

make us americans, that make us the greatest country in the history of the world, that shining city on the hill, to be a beacon for everybody for freedom around the world. thank you very much. god bless you. [applause] >> thank you, everybody, for coming. appreciate it very much. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> rick santorum in gettysburg today. folks on facebook making their comments about his announcement that he is sending his campaign. two weeks before the pennsylvania primary. as long as his name remains on the ballot, i will vote for him.

anthony says santorum should back ron paul. what are your thoughts? in washington today, the consumer financial protection bureau released new rules under consideration. bureau director richard cordray called on lenders to put it back and servicing. this is 50 minutes. >> this is a dignity rich area, and i should have figured this out earlier but i wanted to get the press and distinguished leaders from all throughout washington to come to this area. i should invite richard cordray more often. i will be doing that every week. we are deeply honored to have you here.

are there any operation hope clients with us today? fantastic. you were not sure? are you mortgage clients, credit crisis clients? what about yourself? mortgages? you are here every tuesday, aren't you? tuesday and wednesday. what is your focus? fantastic. anybody here have a positive experience with mortgage modification? a negative experience with mortgage modification? are we still working on your experience? >> [unintelligible]

>> it cannot be having a negative experience it your the d.c. banking commissioner. >> the modification of peace. >> no good deed shall go unpunished. here is what we are not here to do today. we are not here to demonize. people have become experts on what they are against. they can tell you precisely what they do not like. this country was built based on what went before. this center you are in today is one of 10 in the country. we are in 273 cities in america. etrades funds $1 million a year.

they have no branches and somehow they find a million dollars a year for 13 years now for a total of $14 million in cash, not coupons, not home shopping network checks, a real cash to fund the center. [applause] this is a good example of doing well by doing good. my point i was going to make is >> making them's on to kanuris and self employment projects is probably the most employ -- important thing we do. what would happen -- walking

across the street with green riding waves in her hand. she had on beautiful yellow running shoes and a beautiful black running out of it. she was going to exercise. she has had the same experience we had. we have had not won disturbing for problem around the country in 20 years. there is no plexiglas, no security, no cameras. when you treat people with respect, they treat you with respect. whatever goes around comes around. the only problem with this crisis will have had is we treat people like transactions and not like relationships. kegan treat people like relationships, he would not have a crisis. financial dignity is really

transformational. you come in at 550 credit for, you walk out at 70 credits for. he may not think that is a big deal, but is absolutely fundamentally transformational. no matter how many letters to write, it just does not matter. this will be a prime target for check catchers, title ending. the 20 inch rims, it is ridiculous. next to all these title linters, you have -- you must vow never

to be poor again. people are praying on poverty, emotional, psychological poverty. >> over five years, that liquor store turns into a convenience store. that title lender, that -- we want banks. >> we want to encourage them to buy nbc. this is not about -- when you can take a community this agency

is an honored profession doing important work. the last -- when you want a hand up, not a handout, that is what changes the nomenclature to financial dignity. we have funded a billion, $100 million in private investment, not government money, not a handout, $1,100 million of private investment in committees that were written off. the guy who made the suit and wearing today, is selling business. what you should know about me is that " my family lost on a home

to foreclosure. this is personal to me. the number one cause of divorce in america is money. the number one of the domestic abuse in this country is money. they get calls responding to domestic abuse and most domestic abuse calls are routed in arguments over money. not academics, money. they cannot get back in school, not because they did not have good grades are because they did not work hard, but because they did not have the tuition. we think this is an indignity. this is a sin in the 21st century. my mom and dad divorced over money. my mom and dad fought over money. my brother wanted to go to college.

the more money we made, the broker we got. we never lost our dignity. we never lost our self-respect or a work ethic or our belief in ourselves. i actually rebuild an apartment building on the foundation of the house that we lost. that is why we use the phrase financial dignity. whatever goes around comes around. have a billion dollars in mortgages we have restructured and modified. some of the clients are here today. we have a model that works. we are honored to be in a place that the consumer financial

protection bureau wanted to do this important announcement. before i bring up the director, let me say one last thing that is directly related to this gathering this morning. we were called in atlanta georgia to the home of dr. king to build a whole financial dignity center. it is under construction right now. but the story gets even more interesting. but most of you may not know, it is important that we hold up ethical providers of capital and put out of business, make it so painful they don't want to do business, those players who are praying on the poor and underserved. this is everybody's crisis. let me come at this one more time. whether you or white, black, red, brown, or yellow.

70% of all americans are living from paycheck to paycheck. this is everybody's crisis. this is everybody's problem and everybody's opportunity. the story is that when we pulled up to the hope center in atlanta georgia, i was told the story of betty king rebuilding this hope center in that part luther king complex. -- martin luther king complex. martin luther king sr., the father of dr. martin luther king jr.. it's better. it is called citizens trust bank. it is still in business today. the construction lender, on the building we are building in atlanta, georgia today.

we did not target it. they just happen to be there, in that community that care so much about profit. whatever goes around comes around. when dr. king's wife wanted to go open up the king center in georgia, she did not have to beg to the government or anybody else. indignity, home ownership, in addition to civil rights and social justice. small-business ownership. it used to be called the black wall street. this area can thrive again. we want this to be a common cause for people to come here as a common, normal way to live. what that says is very appropriate. this location is the place where the director wanted to make an

announcement and the agency wanted to see this good work. this man is a good man. you don't do business with companies or organizations are governments, you do business with people. dr. cordray understands the plight of people. he was the attorney general in ohio. when he was attorney general, he had returned at $2 billion in retirement savings back to the residents of ohio to give them the dignity of being able to do for themselves when they retired. when he was state treasurer, he helped to revitalize a small business program for minority and underserved small businesses in the state to give people a hand up and not just a handout. it was not just at the state level, he was also at the local level. he helped get his hands around real issues in a real way. he has a real understanding of

these issues. he understands it from 10,000 feet and also from 10 feet away. nothing says more about his character that he did not want to do this announcement in washington d.c. where it would be easy. you got lost on the way here because you have never been here before. it want to turn around and go back home, it is just too difficult. he did not have to come here. he could have done it at the white house. the fact that he went through this much energy and effort to place this message here says not only that he is a good man, an honorable undertaking, and of course we should want to do everything we can to lift up the lenders who are doing it the right way, and making it really

difficult for lenders who are unethical. you can still make money and banking in america. this is not a recession, it is a reset. a culture of crisis and virtues and values. economic prosperity and opportunity, it is going to be difficult and painful. no good deed shall go unpunished. that is okay, most of my heroes are criticized. today you are not the director of cfpb. because you came to this community i will give you the greatest award possible. i will make you an honorary black man. [laughter] [applause]

>> i will do my best. i wanted very much thank you for hosting us here today. they talk about what it is like to be here in the spring time and now we can tell you anacostia's just as attractive in the springtime. i want to thank everybody at operation hold and to say that maybe etrade appreciates the fact that they don't have branches, you are the branch. that is a good collaboration. i also want to say, i would echo the remarks. john alluded to the backpack it -- u.s. -- alluded to the fact that he was six months or more homeless before the age of 18. we are not here to impart any blame on those kind of issues. we are here because we have work to do to we have problems to fix and progress to make. i thank you all so much for

coming today. it is not news for me to tell you that american homeowners are struggling. you know it yourself. at the start of this year, nearly one in for mortgages in this country was under water and 4.5 million mortgages were seriously delinquent. today some cities estimate that as many as 10 million homeowners or at risk of defaulting on their mortgages in the coming years. one of the problems that has made things even harder for homeowners is the state of the mortgage servicing industry which collects payments on behalf of the owners of the loans. this industry has never had a requirement for any strong incentive to meet the needs of consumers. even before the crisis, there were already problem with bad practices and sloppy record- keeping. when the financial crisis hit, however, things got much worse. we have all seen it. when millions of borrowers started to fall behind, focused

on the good times began to crumble the number of the -- under the weight of the growing crisis. the servicing industry proved to be all grasshopper and no ant. they were simply not prepared to weather the lean periods of the cycle. record-keeping and other systems made it harder to sort out bar or problems. instead of investing in new personnel and processes, to many mortgage servicers took short cuts that make things far worse for homeowners in trouble. the problems that resulted from these shortcuts or virtually unbelievable unless you have experienced them for yourself. the same kind of stories i've heard from hundreds and hundreds of people, dating from my days in office in ohio. we created dozens of county task forces to work directly with homeowners as we dealt with the frightening and overwhelming situation. picture every bad customer service experience you have ever

had. calls going unanswered, glacially slow processes, mistakes made and not fixed, a kaleidoscopic cast of characters who never seem to deal with you more than once. paperwork submitted and lost repeatedly. multiplied that amount of frustration exponentially and you can begin to get an inkling of the scope of the process that american space. house-to-house, neighborhood by neighborhood, community by community. consider for a moment the impact on families. we are not talking about a $10 overcharge on a utility bill. we are talking about the largest single investment that people will make in their lifetimes. a matter that goes far beyond the mere economic investment. we are talking specifically about people's homes. a place consecrated by deep bond that only the passage of time and the precious enjoyment of time can create in an enduring

way. quislings that your children love. the deck new built with your own hands -- the swing set that your children love. the door that shut behind you every day as you went to work to earn the money to keep the place that you love. it is not just consumers that suffered. mortgage investors do not benefit from a broken system or services do not fulfill their obligations are make reasonable efforts to mitigate losses. this bail business model widens the pain of the housing crisis and destroys an incalculable amount of consumer trust and financial businesses, perhaps a lasting way. the severity of the problem people experienced is further compounded by the fact that consumers often had no say in choosing their mortgage servicer. at the time they take out a mortgage, they usually know people have the money. they are bought and sold multiple times with scant notice

to the consumer. if the service is shabby and servicers in denver, the customers have no authority to go with their feet and seek another provider who will treat them better. abraham lincoln once said that the legitimate object of government is to do for a community people whatever they need to help them, but cannot do at all or cannot do so well for themselves in their severed an individual capacities. so today the consumer financial protection bureau wants to protect consumers where they do not have the power to protect themselves. the mortgage servicing rules we are considering reflect to basic common sense standards. no surprises and no runarounds. it would apply to all mortgage servicers regardless of how they organize, including banks, credit unions and nonbanks servicers. we envision a world where homeowners can expect fair and reasonable treatment when they fall behind on their payments. and genuine efforts are made to

help them stay in their homes. simply put, we intend to require mortgage servicers to put the service back in servicing. our first several would address the root problem of transparency lacking in that mortgage servicing market. we want to make sure that consumers know how much they owe, what they are paying, and how their payments are being applied, and if consumers of behind on the mortgage to make sure -- unfortunately due to many consumers do not have the right information at the right time. the amount of and due date for the next payment, and recent transaction activity including

the ionization of fees and charges. it may seem amazing that we would have to post such basic requirement, but in this market, we do. other rules we are considering would require server sunni to provide earlier warnings before interest rates change on adjustable-rate mortgages. if consumers find a mortgage servicers are trying to force expensive insurance on them -- we have heard many of those stories. we have heard horror stories about people whose foreclosures were accelerated by having forced insurance imposed on them without notice. with many of the servicers that simply was not possible. to address this unacceptable dilemma, we will be considering new rules to ensure that servicers do not and justifiably and without notice charge and

reasonable rates. if they do, that can be fixed. to require that servers to reach up early to struggling boris. this requirement would ensure that servicers make a good-faith effort to inform borrowers and the first ball behind about the options that can help them avoid foreclosure. services would be required to state clearly how to pursue an exercise those options which would include the process of refinancing and options for loan modification. interest-rate modification and principal reduction show promise in particular circumstances of helping to keep people in their homes while optimizing the situation for investors. all of these rules would give consumers accurate and relevant information so they can understand what they are servicer is doing, identify problems as early as possible, and take follow-up action before things start to snowball. the idea is to bring

transparency back to the day to day transaction between servers and their customers, let borrows nor what is going on, and to make better choices. the second set of rules would address the root problem of lack of accountability in the mortgage servicing market. the rules we are considering are designed to ensure that services do not give consumers the runaround. we have a system where payments are credit did immediately after they arrive, where errors are fixed when necker, where the borrowers records are maintained and were barkin actually beat someone to help when they are in trouble. for too many consumers all of the country, these things do not happen now. and borrowers are trying to save their homes and getting the runaround and turn a difficult situation into a disaster. time after time, people have told us they submitted the information necessary to be considered for loan modification. time after time, they have had the infuriating experience of

being told by yet another customer service represented that the information cannot be found or their are still more documents that must be sent. the rules we are considering would require all servicers to maintain records that are accessible at today, minimize errors, and make corrections quickly when errors occur. the also require services to improve along modification process for concern hours. services would have to notify the bar about loan application options, the documents the bar will have to provide and how long it would take to get a modification. they would have to be the employer's full access to all customer documents so they can answer questions properly and accurately about the current status of the matter in any given time. the consumer notifies the servicer of an error, whether electronically or in writing, the servicer would be required to acknowledge receipt of the notice and respond to it within a specified time frame. many people speak eloquently about their bewilderment and

confusion in the face of inconsistent advice they have received from a number of different people speaking on behalf of mortgage servicers. we are considering a rule or server shares would be required to provide direct an ongoing access to designated service to foreclose and prevention step. they would have to have systems in place so that a consumer can call real human beings with access to relevant documents including records of all prior contacts with the customer. continuity of contact with stop people from getting the runaround. talking to a dozen different representatives, each time telling their story again and each time getting a different answer. it would help with a maddening situation that is all too common, whether servicers left- hand agrees to drop modification while the right hand is working on foreclosure. people need real human beings with the right information to help them deal with something as

monumental life changing as a prospective foreclosure. this is not a radical idea. is what community banks that keep their loans in their own portfolios have done every day for decades to help troubled borrowers. it is what counselors have stepped into the breach to do for so many homeowners around the country because the mortgage servicers have failed. it is common sense, common decency, and it should be the law of the land for all loan servicers. we are required to -- required to put the mortgage service back in mortgage servicing. is not too much desk of businesses that they should not surprise their customers are give them the runaround. how exactly will writing new rules change things for homeowners? after all, government officials have been dealing with this problem for many years. much has been said, much ink has been spilled, but it is not clear the things that got any better for homeowners, at least from what we continue to hear

from people on our new consumer complaint line. i have had personal experience with this issue. in 2007, served as the co-chair of a statewide task force that saw to address the problems of mortgage servicing which already getting to be as severe as home foreclosures were rising to record levels and our state. we agreed on a set of principles on how they would treat their customers. they met with us, the papers, but they did not follow through. we were hindered by fragmented and in complete authority and a four set of tools to ensure compliance. we had little power of the servers and they knew it. it was frustrating for us and the people were trying to help and prove largely ineffective. the unhappy experience we suffered through an ohio was reflected of the same unsatisfying strong growth that occurred in many other states as well.

things are different now that we have the new consumer financial protection bureau on the scene. although we realize a one-size- fits-all approach may not be effective for smaller recent -- smaller community banks and credit unions, it is significant. including banks and their competitors. we'll also be able to back up the new rules right as we have supervision and enforcement bore deeper the first time ever at the federal level over all the mortgage servicers. this allows us not only to examine mortgage servicers to make sure they are following the law but also to enforce the law against them when they fail to do so. we are also building a report by fellow banking agencies and other federal and state partners that have documented a widespread and serious problems in mortgage servicing. problems that were determined not only to violate the law but to be so pervasive that they constituted unsay and unsound

practices that adversely affected the functioning of the broader mortgage markets. the recent mortgage servicing settlement that was filed and has been approved in federal court was a step forward on the road to renew royal but only a partial step. covered only certain financial institutions and certain categories that the service. particular it did not encompass the many independent servicers who specialized subprime more delinquent loans. we are are using all our tools to extend these protections to consumers against the kind of shabby customer service and outright lawbreaking that has been so thoroughly documented. by considering these new rules, by examining servicers compliance with the law, by investigating matters as they arrive and responding to individual customer complaints, as we continue to engage in this work, we will collaborate with our sister regulators for more

complete solutions. recognize we share a common interest in reforming the mortgage servicing market from the standpoint of the financial institutions themselves as well as on behalf of consumers. the rules we are considering are just the beginning of our push for the mortgage market. errors are less frequent and more readily corrected and all reasonable efforts are made to help enable response will homeowners to fall behind in their payments remain in their homes. addressing the root causes of mortgage servicing problems in securing transparency and accountability for boris, consumers would have informational out their options to keep their homes and be in a better position to hold servicers accountable for their decisions. if we look across the range of consumer harm that occurred before, during, and after the recent financial crisis, the homes bought in the problems in mortgage servicing may be the greatest of all.

if we are going to strengthen the future course of the american economy, no task is more important for us right now. we simply must and we will dedicate ourselves to improving how homeowners are treated in these most vulnerable moments of their lives. that weighed heavily upon my mind. it is making a deep imprint on our daily work at the consumer bureau and we are determined to make a difference for so many american families who deserve better treatment at the hands of their mortgage servicers. thank you for your time and attention today. [applause] >> director cordray will be taking up the questions this morning, so you could raise your hand and say your name and affiliation and ask your question. >> i am a realtor in washington d.c., and i have been through

the foreclosure process. i have had many clients call me to say i am behind in my mortgage, can you help me? i am a realtor, not a mortgage lender. my first response to them is, collier mortgage company, let them know what is going on. -- call your mortgage company. i went through foreclosure and i let my mortgage company no months in advance, i am about to run into trouble here. they did not want to hear that. can you pay this month's mortgage? i think it is important that somehow the mortgage company operate with the homeowners before they run into trouble if they are made aware of it. it was a very difficult process. they really did not care. when i did fall behind, it was as if i had not worn them or let them know that i need help, what can you do to help me? it just did not happen.

is there anything you can put in place to make them work with the homeowner before the homeowners actually default? >> i appreciate the question and it goes to the heart of what we are beginning to accomplish today as we proposed these new rules. it is the case for homeowners in that situation that there are confused and bewildered. has never happened to them before they don't know where to turn. when i was at the local level we spent years encouraging people to call their lender, impressing upon the lender that indeed what we did not appreciate was how difficult it is for the homeowner to even know who their lender is when we talk about the mortgage servicer and to get a response. so the rules we are proposing today are all about making sure that mortgage servicers are required to do early intervention, when a homeowner reaches out to them they have to respond quickly and provide

information about the options. when a homeowner does not reach out to them, they reach out to the homeowner and provide that kind of information. they have often been in different about the process. there is ample consideration given and the consumer knows what their options are to potentially avoid foreclosure and being able to stay in the home, getting a loan modification of the other processes that are often available, but if the consumer does not know about them or they get inconsistent information. that is what we are about today. >> operation hope need you more

than i thought we did. there are certain things that are just beyond our reach it is like herding cats. you just cannot get your head around it. there were 1000 investors that represented the mortgages that had all to be coordinated and talk to. the companies using its credibility to try to force responsibility from the sponsors, but that is one thing that we want to fix, and it is

back to use or with the rest of the servicers. just chasing around servicers, and i lost this document and please call back. an uneven playing field. you can stop right now a would be all worth it. >> among the things that operation hope does has been standard issues and feedback, housing counselors that help people navigate the process. the reality is that it has really been any easier for the housing counselors to navigate the process. least have one advantage which is what we have done it before, they have done it several times. they have a sense of how to proceed.

that is what they now have the power to require and to enforce. your organization has worked with thousands of people who have been through this process and has been more difficult than it should have been, more difficult than it already is and more difficult than it would be when they get these rules in place. >> thank you very much for your time this morning. john was commenting on the financial literacy. we believe that financial education is a key component of this and you have tremendous resources around that.

can you speak to some of the resources you have available? is there a possibility of making it a required disclosure on all the servicing forms? >> that is a good suggestion. that is part of the reason we like to come to these events because it is not about me talking so much as people have been ideas and suggestions that help us do our work better. let me say two things. as we prepared and trained our folks internally to take mortgage complaints, credit card complaints and other areas as well, we developed a large number of questions and answers that they are likely to encounter from people grappling with these situations. we want to make it publicly available so that people can benefit by all across the

country. john said in his statement earlier that what we won is not just to have federal agency that protect consumers but a federal agency and other organizations like operation hope that enable consumers to protect themselves, give them the know-how and understanding and appreciation of why things are important, things like checking their credit reports and the like, and that gives them the ability to act. it is helping consumers muscle and understand better how to be informed about financial literacy, and especially the single, one time large decisions they make that affect their future so much, a mortgage decisions, student loan decisions, decisions about retirement plans and processes. we also want to bring the decisions down to where they are more accessible to people, so they are clear, simple,

expressed in straightforward language so people can really understand what they can compare and what they are choosing between and how to go about doing that. for a lot of consumers, there is a sense of deceit on things like financial literacy in financial education. they know they do not know what they should know. and also know that these decisions presented to them are bewildering and hard to penetrate. it is a matter of bringing decisions the public in bringing the public to the decisions, and if we can do both of those things, i think we can succeed. >> we have time for one more question. >> [unintelligible] director cordray, one of the things mr. bryan is mentioning about this event this morning is that there is so much information that is coming down on consumers, the independent foreclosure review, and one of

the things i am seeing in this work is it is hard for me to keep up, let alone the average consumer. will there be an effort to help the homeowner, the consumer just to know what resources are available to them? maybe only available through a housing counselor now, but even that is a lot to ask of that particular person. just trying to get a sense of the bigger issue and how we direct people to the places where they can get the most help? >> that is an excellent point you raise. it is notable that in the mortgage servicing area, federal and state agencies. -- paid very little attention until just a couple of years ago and left them to their devices, and that the not work well for everyone. there has now been a rush of activity. activity.